U.S. Jobless Claims Fell; PPI Up

Arthi Gupta
16 Sep, 2010
New York City

U.S. stocks declined after weekly jobless claims fell 3,000 to 450,000. Producer prices increased 0.4% and foreclosure filings fell in August. FedEx net surged 110% to $380 million. IBM agreed to buy OpenPages. OpenTable agreed to acquire UK based restaurant reservation and review company.

[R]9:55 AM New York – U.S. stocks declined after weekly jobless claims fell 3,000 to 450,000. Producer prices increased 0.4% and foreclosure filings fell in August. FedEx net surged 110% to $380 million. IBM agreed to buy OpenPages. OpenTable agreed to acquire UK based restaurant reservation and review company.[/R]

Asian markets dropped and European markets traded mixed.

OpenTable agreed to acquire toptable.com for $55 million.

Initial claims for unemployment benefits unexpectedly decreased in the week ended September 11, according to the U.S. Labor Department today. Claims fell to 450,000 from the previous week''s revised 453,000.

The U.S. Labor Department also said producer prices increased in August with energy prices rebounded sharply. Producer prices index rose 0.4% in August following a 0.2% increase in July.

Core prices excluding food and energy prices, edged higher 0.1% in August compared to a 0.3% increase in July.

RealtyTrac reported that foreclosure filings in August declined 5% from last year, while it grew 4% from the previous month. According to the default data collector, one in every 381 U.S. housing units received a foreclosure filing during the month.

RealtyTrac said foreclosure filings, which include default notices, scheduled auctions and bank repossessions, were reported on 338,836 properties in August. Lenders foreclosed on 95,364 U.S. properties in August.

Bank repossession activity increased 25% from a year ago and 3% sequentially in August.

The Reserve Bank of India hiked its key rates for the fifth time this year to contain inflation and anchor inflationary expectations amid robust economic growth. The repo rate was raised 25 basis points to 6% and the reverse repo rate 50 basis points to 5%, with immediate effect.

International Business Machines Corp. announced an agreement to acquire OpenPages, a privately-held company based in Waltham, MA. Financial terms were not disclosed. IBM noted that the acquisition of OpenPages expands its business analytics capabilities to support compliance and risk management processes.

OpenTable, Inc. signed an agreement to acquire the entire issued share capital, including outstanding options of UK-based restaurant reservation site, toptable.com for about $55 million in cash. The transaction is expected to close in the fourth quarter of 2010 and OpenTable plans to fund the acquisition with existing cash, cash equivalents and short-term investments.

Earnings Review

AAR Corp. ((AIR)), the aerospace and defense contractor stated first quarter consolidated sales increased 21% to $412.2 million from $341.5 million in the year ago quarter. Net income in the quarter soared 34% to $13.7 million or 35 cents per diluted share, compared to net income of $10.2 million or 27 cents per share in the prior year quarter.

Capital One Financial Corp. ((COF)), the diversified financial services company said its U.S. credit card defaults increased marginally in the month of August. In a filing with the Securities and Exchange Commission, the company reported that annualized net charge-off rate for U.S. credit card increased to 8.19% from 8.13% in July.

Clarcor Inc. ((CLC)), the maker of mobile, industrial and environmental filtration products reported third quarter revenues rose 14% to $262.77 million from $230.27 million last year. Net earnings in the quarter grew 33% to $28.3 million or 55 cents per diluted share compared with net earnings of $21.28 million or 42 cents per share a year ago.

FedEx Corporation ((FDX)), the transportation company reported first quarter revenues increased 18.1% to $9.457 billion, from $8.01 billion in the prior year quarter. Net income in the quarter surged 110% to $380 million or $1.20 per share, compared with net income of $181 million or 58 cents per share in the same quarter last year.

Kraft Foods Inc. ((KFT)), the manufacturer and marketer of packaged food products announced at an analysts meet in New York that the company plans to deliver 5% or more organic revenue growth, earnings per share growth of 9% to 11% and expects margins in the mid- to high-teens over the next three years.

Park City Group, Inc. ((PCYG)), a software services provider reported fiscal 2010 total revenues rose 82% to $10.87 million from $5.96 million last year. Net income for the year was $0.17 million compared with net loss of $4.04 million a year ago. On a per share basis, loss was 1 cent compared with loss of 48 cents per share in the prior year.

Pier 1 Imports, Inc. ((PIR)), the retailer specializing in imported home furnishings and decor reported second quarter sales gained 8.1% to $309.9 million, from $286.7 million in the year-ago quarter. Net income generated in the quarter was $14.4 million, or 12 cents per diluted share, compared to a net loss of $15.8 million, or 17 cents per share, for the same period last year.

The Dress Barn, Inc. ((DBRN)), the specialty apparel retailer reported fourth quarter revenues surged 78% to $710.9 million from $398.9 million in the prior-year quarter on comparable store sales rise of 7%. Net income in the quarter soared 64% to $42.0 million or 52 cents per diluted share, compared to net income of $25.6 million or 4 cents per share in the year-ago quarter.

For the full year, net sales increased 59% to $2.37 billion from $1.49 billion a year ago. Net income for the year increased 100% to $133.38 million or $1.73 per share compared to net income of $66.57 million or $1.06 per share in the same period of the previous year.